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What is Acorns?

Acorns is a smartphone app (for Android and iPhone) that lets you start microinvesting into a stock portfolio based on your risk tolerance.

While there are tons of apps and services that help you invest, Acorns is different because it let's you invest as little as a few bucks at a time at any point during the month.

Here's there 30 second promotional video so you can get an idea about them.

How Acorns Works

You connect Acorns to a bank account, credit card, debit card, etc. Then, whenever you spend money on something using that account, it rounds up to the nearest whole dollar and sets that money aside.

When you reach $5, it moves it from your bank account over to your investing account.

So, let's say you buy a pack of gum for .79 and use your credit card (I know, financing a pack of gum, huh). You'll spend .79 on the gum and Acorns will take .21 toward your investments.

If you spend 102.43 on groceries, Acorns will take .57 and put it toward your investments

When you make enough purchases, it will reach the $5 thresh hold and the money will be taken from your account and moved to the investment account.

Pretty cool, huh?

How It Invests Your Money

They don't really advertise it, so I dug through all their legal documents to find out exactly how it works.

Acorns uses a very advanced algorithm based on modern portfolio theory. As you invest money, it buys a series of ETFs to match your investing criteria and risk profile, based on the input you put into the app.

Sometimes the mix of your funds has changed a lot lately due to changes in the market. Acorns will buy more or less of various ETFs each time in order to make the portfolio balanced where it needs to be.

If you adjust your profile, it will adjust all future purchases to get it back into alignment. If you make a dramatic change (say, going from conservative to very aggressive) it will automatically sell a portion of your portfolio and buy other ETFs to get it back into alignment.

It is really quite advanced and I love how you never have to rebalance your portfolio ever again.

The Money Multiplier

Acorns has this really cool feature called the multiplier. Basically, it takes your roundups and multiplies it by 2x, 3x, or 10x.

Let's say your multiplier is 3x. Going back to that pack of gum you bought for .79. Acorns will take .21 and then multiply by 3 to get to .63 that it will take and move to your investment account.

I love this feature because you can save a much larger portion of your spending simply by adjusting this feature.

If you really want watch your spending, set it to 10x and see how much you think before you make every purchase!

Setting up an Acorns Account

This part of the Acorns review is about setting up your account and getting started.

It's really simply, you just need to attach it to a bank account at a minimum, but you can also attach it to any number of credit or debit cards.

You'll need the login info to your bank account and credit cards, but the process takes a total of less than 5 minutes.

In a lot of other reviews that I write, this section is a lot longer. As much as I'd love to write another 300 words on setting up an acorns account, I can't.

Because, it's that easy.

Changing Your Spending Habits

I can really only speak for myself in this Acorns review, but I know it changed my spending habits.

I'd look at just how much money it was setting aside and I'd have a "holy SH*T" moment. In order for it to take hundreds of dollars out of my account, I must have been spending thousands!

...and sure enough, I was.

Then I set the multiplier up a bit and saw even more come out.

So, I started to pay attention to just how I used my credit cards.

Soon enough, I was investing way less. But, that meant I was spending way less too! Not only was my investment account growing, but my bank account was growing faster than ever before.

So, jacking the Acorns multiplier way up is a good way to help you watch your spending habits!

Acorns Later - Saving for Retirement

Acorns recently rolled out something they are calling Acorns Later.

Basically, it is an IRA account where you can invest in it on a recurring basis, or on a one-time basis.

Acorns later doesn't allow for the round up option as the traditional acorns option does.

It also costs $1 per month to have.

Acorns Spend aka Acorns Debit Card

This one is even newer than Acorns Later. I was skeptical about it at first, but after taking a look at it, I realized it's pretty awesome.

Basically, this is a bank account and debit card that ties in directly with your Acorns investment and Acorns retirement accounts.

It does cost $1 per month, which in this day of high-fee bank accounts is relatively cheap, but there are still plenty of bank accounts out there that have no fees at all.

So, the only reason to really get this is to tie it directly in with Acorns Found Money. Basically, if you use this debit card at any of their partners, you automatically get the % back from the vender.

This is different because using the acorns app, you generally have to click through a link to get credit (so you miss out on some of the benefit because you probably aren't browsing their app every two seconds to find partners before you buy anything.

So, if you really want to max out the investment account, the best way to do it is with Acorns Spend.

Or, you could just keep your fee free account and click through the app to get your cash back.

Conclusion of Acorns Review

I have the Acorns app and have been investing with it for around 6 months.

Other Acorns Reviews From Around the Web

Acorns Rating - 8.5/10

The Acorns app invests your spare change. It rounds up to the nearest dollar (or more) for every credit card purchase and micro-invests the difference. It makes saving fun and easy. On the downside, the increments are probably two small to be effective for long-term savings.

Acorns Rating - 3.5/5

If you want to make the most of your spare change and get the occasional retailer kickback, there’s really no better place to do that — especially now that Acorns offers IRA accounts. The automatic roundups at Acorns make saving and investing easy, and most investors will be surprised by how quickly those pennies accumulate.

The downside? At small balances, Acorns fees can cut into or completely wipe away investment returns.

Acorns Rating - Thumbs Up

In nearly 30 days of having an account and in a market that's been losing ground since the start of the new year I have made the grand total of $3.40 with a gain of 2.81% in just that period, which is actually really great. If it can keep this rate up, I might actually make some money.

But for me, being still very young and having never invested money in the stock market before, this has done exactly what it's meant to. I've become genuinely interested in the market and want to invest as much money as I can, which has hopefully led me to a successful future investing.

Acorns Review Summary

Review of Acorns App

Minimum Balance

Fees

Ease of Use

Options

4.8

Acorns Review Summary.

Acorns is a microinvesting smartphone app that allows you to save a few pennies on every purchase you make, on a set schedule, or randomly whenever you want to make a one time transfer. It is also a full-featured robo advisor that automatically allocates and adjusts your portfolio based on your criteria and risk tolerance.

Overall this is a great app that can help you adjust your spending and save more every month.

Acorns fees are fixed and not percentage based. So, if you have a really low balance the fees can be a high percentage of the balance. As your balance grows, these fees because very low compared to other investing options.

Eric is an investor that achieved financial independence at the age of 30. He started in 2009 with the purchase of his first triplex and now owns over 470 units.
He spends his time with his family, growing his businesses, diversifying his income, and teaching others how to achieve financial independence through real estate.
Eric has been seen on Forbes, Trulia, WiseBread, TheStreet, and other financial publications.

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